Market Overview: FTSE 100 Futures
The FTSE futures market moved sideways to down last week in a FTSE 100 bear channel with another bear bar. Limit bulls bought below the outside bar and the strong reversal on Friday will scare some bears off selling too low again. We are always in short so high probability we are going lower but bears will scalp rather than swing.
The bulls need a buy signal next week – they might get a daily buy setup for a swing back to the daily moving average.
FTSE 100 Futures
The Weekly FTSE chart
- The FTSE 100 futures was a bear bar closing on its midpoint so it is not as bearish as it could be.
- It is low in a bear channel closing below the big round number of 7000.
- It is the 3rd push down from the highs of the 12-month trading range so we might pause here.
- The bulls see a sideways bar at 7000 and the bottom of a 12-month trading range. After last week’s outside bar we said they would buy below and they did.
- The bulls didn’t get a buy signal last week so we expected sideways to down. The bulls need a buy signal, a weekly bull bar closing on its high for a High 2 buy low in a trading range. That’s a higher probability setup.
- The bears see a tight bear channel, 3 pushes down and no decent countertrend bars. We are far below the moving average so bears might wait to sell higher for a stronger move down.
- We hit the bear’s measured move from the lower high, the next target is the measured move from the higher high.
- Bulls want a reversal and two legs sideways to up – Al calls this 10 bars and 2 legs – 10B2L. But unless they get a buy signal signifying a tight trading range, nears will keep selling above bars.
- Limit bulls made money for the past 2 weeks so it’s not as bearish as it could be.
The Daily FTSE chart
- The FTSE 100 futures was a bull bar with a huge tail above and closing at its low, so it was a reversal signal on Friday and we might gap down on Monday.
- On Thursday traders bought new lows and made money swinging up to the moving average, but did not hold into the weekend, which suggests another leg down and reversal next week.
- The bulls see a double bottom and second buy signal. It was a High 2 buy setup and it hasn’t failed yet. Bulls scalped at a measured move from the bar below.
- The bulls want another bull bar closing on its high for a second-entry, long swing up to the moving average and they might get it.
- The bears see a tight bear channel, it was a micro channel until Friday and then went above a prior bar’s high, so it is a Low 1 sell below on Monday.
- A Low 1 low in a channel, with a possible double bottom and a bull signal bar is not a high probability trade, so some bears might wait for a bear bar to sell below instead.
- The problem is the location for the bears. The risk is increasing and the probability decreasing. So bulls might take the lower probability but higher reward trade opposite.
- The bears want a small bear bar to reduce the risk of selling above Friday’s high and a Low 2.
- We could be at the lows of a developing trading range and the bulls might get low-probability setups that work well. Bears uneager to risk up to the moving average might close their trades and look to sell higher.
- Thursday was a strong enough move by the bulls to put the bear trend into sideways trading for a few days. If they get another buy signal and a High 2 that could be the start of the sideways trading for the next few weeks.
Market analysis reports archive
You can access all weekend reports on the Market Analysis page.